iShares MSCI Singapore ETF

EWS

Market cap $869M

iShares MSCI Singapore ETF is rated a Buy, leveraging Singapore's aggressive AI adoption and strong governance as a forward-looking growth catalyst. Singapore's government-driven AI initiatives, including tax incentives and workforce upskilling, have propelled AI adoption from 24% in 2023 to 66% by 2025. EWS offers attractive fundamentals: a low ~15.3 P/E, ~2.3 P/S, a 0.5% expense ratio, and a >4% dividend yield, despite sector concentration in financials.

ASEAN's dividend opportunity is underpinned by diverse and evolving market characteristics. The FTSE ASEAN Index, which captures the large- and mid-cap companies listed in the five ASEAN markets - Singapore, Malaysia, Indonesia, Thailand and Philippines - has delivered a 10-year average dividend yield of 3.57%. Across multiple market cycles over the past 25 years, a back-test of the FTSE ASEAN ex REITs Target Dividend Index's strategy showed notable resilience during market downturns and lower overall volatility compared with the broader ASEAN market.

EWS has a highly concentrated, cyclical exposure portfolio that tilts towards industrials and consumer discretionary sectors. It underweights local banks and telecommunication stocks, limiting its participation in STI's strongest multi-year performance. With a P/E of c.15.5, many constituents are at record highs, which heightens downside risk on earnings misses.

Singapore offers stable growth, strong governance and a resilient market, making Singapore-focused ETFs a strategic Asia allocation option.

The reading was lower than Reuters-polled analysts' median estimates of 1.3%.

iShares MSCI Singapore ETF (EWS) has surged 33% year-to-date, outperforming US stocks and regional peers, driven by strong momentum and a weaker US dollar. EWS offers exposure to large and mid-cap Singaporean equities, boasts a low 14.1x P/E, and provides a high 3.59% trailing dividend yield. The ETF is concentrated in Financials and Industrials, with its top 10 holdings comprising 77% of the portfolio, and features strong technical momentum.

Singapore's central bank has kept its policy band unchanged after easing policy in its last two meetings, as the city-state continues to face risks from looming U.S. tariffs.

Among APAC equity markets, Australia has a higher beta to oil prices while India, Indonesia and Thailand have lower betas. Domestic political uncertainties have been one main reason for the decoupling trend seen in Indonesia and Thailand.

Singapore's stable, innovative economy and prudent governance make EWS a relatively safe investment with solid long-term upside, despite recent strong gains limiting near-term potential. EWS offers geographic diversification, low management fees, and a 3.83% dividend yield, but is concentrated in traditional sectors and lacks exposure to emerging tech. Singapore's population growth is driven by skilled immigration, supporting domestic demand and competitiveness, though demographic and political risks remain.

EWS has outperformed the S&P 500 recently, sparking interest in Singapore's innovative economy. Despite these recent gains, EWS's long-term returns are lackluster, with only 151% in total return over nearly 30 years. The ETF's seventeen holdings do not effectively capture Singapore's broad economic strength and innovation leadership.